US, EU aluminum industries pushing for tariff phase out, not quotas: panel

The US and EU aluminum industries agree that the US' Section 232 aluminum tariffs should be slowly phased out for European exporters instead of being replaced by tariff rate quotas that have been suggested as alternatives to Section 232 steel tariffs, panelists at the US Aluminum Association Annual Meeting said Sept. 30.

"We are calling on the Biden administration to recognize that aluminum and steel are two very different industries, and a one-size-fits-all trade policy really doesn't make a lot of sense," Ryan Olsen, the Aluminum Association's vice president of market growth and development, said.

"The industry and the association oppose tariff rate quotas as a replacement of the Section 232 tariffs."

Olsen said quotas would create additional kinks in the marketplace and allow certain stakeholders to leverage them to manipulate prices.

"The end result would be uncertainty for businesses and higher prices for any consumers who buy aluminum products," he added.

Instead, the US and EU industries have aligned themselves on a "preferred approach" that would allow a gradual unwinding of the aluminum tariffs over a three-year period, Olsen said.

John Hermann, a partner at Kelley Drye and trade counsel for the Aluminum Association, said the phase-out strategy seeks to achieve tariff parity between the two industries.

"The US generally has lower normal duty ratings than the EU," he said. "Aluminum sheet duties in the US range from about 3.8% to 5.3%, but the EU's normal tariff is about 7.5%."

Hermann added that a gradual and staged repeal of the tariffs would change the market in a way that can be predictable and less harmful to producers and consumers.

To further strengthen aluminum trade between the US and EU, Olsen said the EU must also pursue and retain strong trade actions against Chinese flat rolled aluminum products and increase efforts to combat Chinese industrial policy that provides subsidies to its producers.